Equity Markets

Equity funds or also called stock mutual funds are a special type
of mutual fund wherein, the corpus accumulated through this fund is
invested in stocks of public companies. The operation of the Equity
Funds is regulated by the Association of the Mutual Funds of India
(AMFI).

The operation of the Equity Funds is regulated by the Association of the
Mutual Funds of India (AMFI). Further, the functions of the AMFI are
being regulated by the Securities and Exchange Board of India more
popularly known as SEBI.

With the opening up of the Indian economy post 1990s witnessed
tremendous rise of the Indian financial sector, especially the capital
market. The Ministry of Finance Government of India played an important
role in the substantial growth of the Indian financial market. The
regulatory of the capital markets of India were made more transparent
and accountable in dealing with capital market transactions.

Definition and features of the Equity Funds:

Equity funds also known as stock mutual funds are a special type of
mutual fund wherein, the corpus accumulated through this fund is
invested in stocks of public companies. Holding of stocks or equity in a
company means having part ownership or equity in that particular
company. The main objective of holding stocks of a company is to reap
profit on investment in such stocks after the company makes a profit in
its business.

These stocks are generally classified as small, medium, and large sized
stocks, which is further defined according to their individual market
capitalization. The equity managers are trained professionals who format
and pick stocks for investments. The formation of equity portfolios are
generally made either by applying value-approach or by growth-approach.
In the value-approach method the stocks with lesser value than its
competitors are picked and in the growth-approach method the stocks with
higher growth opportunity than its competitors or markets are picked
for investments. In another type of approach, both the value and growth
based stocks are picked for investments.